Coffee prices reach newest low in more than a decade

In April 2019, the International Coffee Organization (ICO) composite indicator fell by 3.2 per cent to 94.42 US cents per pound, the lowest monthly average since July 2006 when the price reached 88.57 US cents per pound.

The daily price fell to 91.79 US cents per pound on 17 April, the lowest it had been since 1 August 2006 when it hit 88.77 US cents per pound.

The ICO says prices for all group indicators fell in April 2019.

Colombian Milds saw the smallest month-on-month decline as it fell 0.6 per cent to 124.42 US cents per pound. This is the lowest price for Colombian Milds since July 2007 when it amounted to 120.78 US cents per pound.

Other Milds declined by 2.2 per cent to 121.13 US cents per pound. This level was last observed in December 2008 when it reached 118.97 US cents per pound.

The price for Brazilian Naturals declined by 3.5 per cent to 92.47 US cents per pound, and Robusta fell by 4.8 per cent to 73.28 US cents per pound. Prices for Brazilian Naturals are at their lowest level since September 2005 when they amounted to 89.48 US cents per pound. However, the Robusta indicator price experienced a more recent low in May 2010 when it reached 70.70 US cents per pound.

Low prices discouraged sales in March 2019, and world coffee exports amounted to 10.98 million bags, 3.8 per cent lower than in March 2018.

Across the first half of coffee year 2018/19 (October 2018 to March 2019), shipments increased by 4.1 per cent to 63.15 million bags, which the ICO says reflects the ample supply of coffee on the international market.

Shipments of Brazilian Naturals rose by 18.4 per cent to 21.7 million bags, and Colombian Milds grew by 8.6 per cent to 7.95 million bags.

Exports from Brazil in the first half of coffee year 2018/19, fuelled by significant growth in its harvest and encouraged by a depreciation in the exchange rate, increased by 26.5 per cent to 21.29 million bags, driving the growth in global exports.

Between April 2018 and March 2019, world exports rose by 4 per cent to 124.72 million bags. The exports in this period coincide with the crop year for a number of countries, including Brazil and Indonesia, the world’s largest and fourth largest producers.